Purrfect Pets, Inc. provides animal daycare for $29 per day. Customers buy three month packages, which provide 15 days of care per month. In January they received cash payments from 10 customers. For the month of January, they will recognize ________ of revenue under the cash basis, and ________ of revenue under the accrual basis.

Question

Quizplus · Accepted Answer

Under the cash basis, revenue is recognized when cash is received, so $29 x 15 days x 10 customers = $4,350. Under the accrual basis, revenue is recognized when earned, so $29 x 15 days x 10 customers = $13,050.